Question 86349: Business and finance. The electricity costs of a business decreased from $12,000 one year to $10,920 the next. What is the rate of decrease?
Found 2 solutions by venugopalramana, ikleyn:
Answer by venugopalramana(3286)   (Show Source):
You can put this solution on YOUR website! Business and finance. The electricity costs of a business decreased from $12,000 one year to $10,920 the next. What is the rate of decrease?
ORGL=12000
AFTER 1 YEAR =10920
DECREASE = 12000-10920=1080
RATE OF DECREASE =1080/10920 = 0.0989...OR....9.89%
Answer by ikleyn(54062)  (Show Source):
You can put this solution on YOUR website! .
The electricity costs of a business decreased from $12,000 one year to $10,920 the next.
What is the rate of decrease?
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The solution in the post by @venugopalramana is incorrect,
since the base for comparison is taken incorrectly there.
Below is my correct solution.
The base value is $12,000. <<<===--- this is the base value to compare with (!)
The next year's value is $10,920.
The decrease is 12000 - 10920 = 1080 dollars.
The rate of decrease is  = 0.09.
ANSWER. The rate of decrease is 0.09, or 9%.
Solved correctly.
In such problems, if the opposite is not stated explicitly, the base for comparison is ALWAYS the starting value,
and the rate of increase or decrease should be calculated relative to this value, by default.
It is the BASIC RULE in such kinds of problems,
and it is the BASIC RULE to memorize and to use.
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